NEW YORK (Reuters) - Installed U.S. wind energy capacity
grew nearly 45 percent last year to 16,800 megawatts, or about
enough to serve 4.5 million homes, as interest in low-carbon
power grew, an industry group said on Wednesday.

Texas remained the top state in both total wind power
capacity, which reached with 4,446 MW, and new wind power
capacity, the annual report from the American Wind Energy
Association said.

The two largest wind projects were both in Texas: Horse
Hollow, owned by FPL Energy, a unit of FPL Group, and
Sweetwater, owned by Babcock & Brown and Catamount.

Wind power remained the most common source of new installed
electricity after natural gas. Some U.S. utilities increased
investments in renewable power generation as the country moved
closer to regulating greenhouse gases like carbon dioxide, much
of which is generated by coal-fired power plants.

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AWEA spokeswoman Christine Real de Azua said a U.S.
incentive known as the production tax credit also helped the
industry grow last year. The PTC is set to expire at the end of
the year and wind backers hope Congress will renew it to ensure
solid growth in coming years.

"With the right public policy, (wind) will be a growing and
affordable part of our long term plans," said Dick Kelly, the
president and CEO of Xcel Energy Inc. In 2007, Xcel was the
U.S. utility with the most wind power on it system for the
third year running, with 2,635 MW, the report said.

While wind power growth soared last year, the industry has
also faced challenges recently. The Texas electric grid
operator had to briefly cut power service to industrial
customers in late February when the wind in the state stopped
blowing. While the industry said improvements in forecasting
would help smooth electricity delivery going forward, the
matter focused attention on the intermittent nature of wind
power.

In Wednesday's report, the state of California came in
second in the category of total installed wind capacity, with
2,439 MW, Minnesota was third with 1,299 MW, and Iowa was
fourth with 1,271 MW. Iowa

The largest manufacturer of turbines installed in the
United States last year was GE Energy, with 1,560 turbines,
while Denmark's Vestas provided 537 turbines and Siemens
provided 375.